Charlotte's Office Boutique, Inc. - Page 1

                                   121 T.C. No. 6                                     

                               UNITED STATES TAX COURT                                

                  CHARLOTTE’S OFFICE BOUTIQUE, INC., Petitioner v.                    
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 5077-01.              Filed August 4, 2003.                 

                    P is a C corporation owned equally by O and her                   
               husband.  P petitioned the Court under sec. 7436(a),                   
               I.R.C., to redetermine R’s determination that P was                    
               liable for unreported 1995 through 1998 employment                     
               taxes and additions to tax under secs. 6651(a)(1) and                  
               6656, I.R.C.  That determination resulted from R’s                     
               determination that O received “wages” in the form of                   
               payments which P made to O primarily as “royalties”                    
               and, for 1995 and 1996, that P also had “Other Workers”                
               who received “wages”.  R concedes his determination as                 
               to the other workers and moves the Court to dismiss                    
               this case for lack of jurisdiction as to 1996 through                  
               1998.  The parties agree that, during those years, O                   
               was P’s employee as to other payments which O received                 
               from P as wages.  Held: The Court has jurisdiction over                
               all of the petitioned years in that R has determined                   
               contrary to P’s audit and litigating position that:                    
               (1) O received the disputed amounts as wages and                       
               (2) P is liable for the payment of employment taxes                    
               under subtitle C as to those disputed amounts.  As to                  

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